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London-based artificial intelligence startup PhysicsX is valued at around $1 billion as it raises $135 million from investors and becomes the latest company to profit from a surge in interest in defense technology.
Founded by two former Formula 1 engineers, the six-year-old startup uses AI to better design products across the manufacturing and defense industries, including engines and drone components.
The deal, which is backed by Siemens and Singapore’s states, comes amid a flood of investors’ desires for defense groups as a highly charged geopolitical environment Spurs countries around the world to increase military spending.
“We’ve seen actual inflections and appetites from European customers. Certainly not only in aerospace and defense, but also in the automotive and materials sectors.”
“I think this is what’s happening in these industries simultaneously reflects the general awakening of Europe and the West,” he added.
PhysicsX, which signed a deal with Rio Tinto and Leonardo Aerospace, employs more than 150 people between London and New York.
Cobo, who co-founder Robin Truy met while working for the Renault Formula One team, said the startups are aiming to capitalize on new demand from European and North American companies seeking to maximize manufacturing efficiency.
“One of the things that changed in Europe was the rise and the expectation that orders would increase, which led to a more positive attitude in R&D,” he said. “(Companies) are trying to change the way we engineer our spending is related to our spending.”
The deal also includes support from Atomico and applied materials, but those familiar with the issue say the funding raised will be raised to $175 million, valued at just under $1 billion.
The deal comes after German defence technology group Helsing announced €600 million this week’s funding, led by the investment company of Spotify founder Daniel Ek, became one of Europe’s most valuable startups, cherishing it for €12 billion. Both European drone manufacturers’ Quantum Systems and Tea Bar were valued at over 1 billion euros last month.
Atomico partner Laura Connell said the investment in PhysicsX showed how the company is taking advantage of the “turning point” in technology development.
“Yes, there’s a geopolitical element to what’s going on in Europe, but there’s also a broader global conversation about how to fundamentally do less,” she said.
Corbo, who sold former startup data analytics company Quantumblack to McKinsey in 2015, said the company is European and proud to maintain its main headquarters in London despite the pressure of other UK startups moving through the Atlantic.
“We consider the great opportunities and essentials of technology across industrial bases in Europe, and we have high confidence that this is the right time to build a company like ours from Europe,” he added.
